REPORTER'S NOTEBOOK: At Purchasing Card Summit, Hope and Frustration

Though Mark Lauritano, vice president of the WEFA Group, called 1996 "the spring of hope for the commercial card market" at a recent Faulkner & Gray conference, other speakers said the year's growth has been disappointing.

Interest in the market is high, evidenced by the growth in attendance at this year's Commercial Card Conference, to 214 participants from 159 last year.

The conference last week at San Francisco's Fairmont Hotel drew executives from corporations like Sprint, Hewlett Packard, Shell Oil, and Kinkos, as well as bankers, processors, and consultants from around the country interested in learning more about the emerging market.

The trouble is, Mr. Lauritano and others said, issuers have had little success in tapping into that market.

Out of a potential $391.4 billion in annual corporate spending, only $3.9 billion is charged on purchasing cards, Mr. Lauritano said. In the travel and entertainment segment, $38.9 billion of $143.9 billion is charged on cards, and that segment is dominated by American Express.

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The nascent purchasing card business is proving harder to translate from theory to practice, or from pilot to rollout, said several industry experts.

"The procurement card is in its infancy," D. Dale Browning, president and chief executive, Procard Inc., told attendees. "It's a horribly slow process."

Since last year, competition has increased, with some large corporations doing comparison shopping, piloting programs from several issuers at the same time.

Purchasing card software, still in development stages, is not providing the type of information promised in many cases, speakers said.

"Some of the decreased performance versus expectation for the early '90s has to do with" the difficulties of creating a new system, said Peter Perialas, vice president, Hogan Systems.

"We have proven there is a product need," said Mr. Browning. "All these issues must be resolved if we expect this thing to explode."

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Though some presentations at the two-day affair offered insights, participants were dissatisfied with much of the agenda.

Richard Kimmel, president of Kimmel & Co., an advertising agency, berated bankers for their lack of creativity, and their inability to "think outside the box."

He suggested bankers stop asking how much ads will cost, and instead, consider how much money commercial card programs will generate. Mr. Kimmel didn't offer much in the way of constructive suggestions.

A group of GE Capital executives called his presentation "condescending."

Others complained that the speakers skirted the issues, talking in vague generalities.

"Where's the substance?" asked a Sprint executive. A Visa representative said she couldn't "see the relevance" of many lectures, calling some of them "elementary."

Charles W.B. Wardell 3d, partner at Lamalie Amrop International, emphasized the importance of global marketing and service standards, but his advice, such as "stay in touch" and "be positive," seemed less than enlightening to many attendees.

Though John Bryant, a preacher from South Central Los Angeles, and chairman and chief executive of Operation Hope, an organization dedicated to the revitalization of inner-city communities, gave a rousing address on the benefits of marketing to minorities. Some said his presentation would have been more appropriate for a consumer card audience.

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